Benefit debt soars to record £1.8bn

Benefit overpayments are continuing to rise, with the outstanding debt owed to the Department for Work and Pensions (DWP) hitting a record £1.8 billion, the Whitehall spending watchdog has said.

The National Audit Office (NAO) said although the DWP managed to recover £272 million in 2007-08, it was outstripped by the £558 million made in overpayments.

A total of £205 million in overpayments had to be written off altogether, including £28 million wrongly paid out to claimants after they died.

The result was a 6.6% increase in the accumulated sum owing to the DWP from £1.67 billion to £1.78 billion.

Edward Leigh, chairman of the Commons Public Accounts Committee which oversees the work of the NAO, said the DWP was facing a "debt mountain" which it needed to claw back.

He said: "In these tough economic times surely the Government should be helping to prevent people on benefits getting into debt, rather than having to put so much effort into recouping it from claimants once it has been overpaid?"